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© IRENA 2021 Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed and/or stored, provided that appropriate acknowledgement is given of IRENA as the source and copyright holder. Material in this publication that is attributed to third parties may be subject to separate terms of use and restrictions, and appropriate permissions from these third parties may need to be secured before any use of such material. Citation: IRENA (2021), Renewable Readiness Assessment: The Republic of Tunisia, International Renewable Energy Agency, Abu Dhabi. ISBN: 978-92-9260-296-3 About IRENA The International Renewable Energy Agency (IRENA) is an intergovernmental organisation that supports countries in their transition to a sustainable energy future and serves as the principal platform for international co-operation, a centre of excellence and a repository of policy, technology, resource and financial knowledge on renewable energy. IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy – including bioenergy, geothermal, hydropower, ocean, solar and wind energy – in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth and prosperity. Acknowledgements This report was prepared by IRENA in close collaboration with the Government of Tunisia, as represented by the Ministry of Industry, Energy and Mines and the National Agency for Energy Conservation (ANME). The report benefited from the input of various experts, notably from Amira Klibi (MEMTE), Jihene Touil (UNDP), Rafik Bezzaouia (STEG), Rim Boukhchina (RCREEE), Nafaa Baccari (ANME). IRENA colleagues who provided valuable review and support include: Abdulmalik Oricha Ali (ex- IRENA), Imen Gherboudj, Huiyi Chen, Rafael De Sa Ferreira, Dolf Gielen, Asami Miketa. Main Contributors: Zoheir Hamedi, Reem Korban, Gürbüz Gönül, Abdelkarim Ghezal (consultant) Disclaimer This publication and the material herein are provided “as is”. All reasonable precautions have been taken by IRENA to verify the reliability of the material in this publication. However, neither IRENA nor any of its officials, agents, data or other third-party content providers provides a warranty of any kind, either expressed or implied, and they accept no responsibility or liability for any consequence of use of the publication or material herein. The information contained herein does not necessarily represent the views of all Members of IRENA. The mention of specific companies or certain projects or products does not imply that they are endorsed or recommended by IRENA in preference to others of a similar nature that are not mentioned. The designations employed and the presentation of material herein do not imply the expression of any opinion on the part of IRENA concerning the legal status of any region, country, territory, city or area or of its authorities, or concerning the delimitation of frontiers or boundaries.
Renewable Readiness Assessment: Foreword from the Minister of Industry, Energy and Mines For over three decades, Tunisia has been committed to a clean energy transition through a proactive and uninterrupted energy management policy, positioning itself as a pioneer in the region. Tunisia embarked on an accelerated energy transition to achieve multiple objectives; to realise its energy security through a diversified energy mix and to improve the country’s economic competitiveness within the framework of its strategic vision towards a low-carbon economy. Tunisia’s energy transition strategy is based on four main pillars: energy security; increasing energy independence; reducing costs; and diversifying energy resources. With abundant renewables sources, renewable energy technologies constitute the main pillar of Tunisia’s energy transition strategy given the socio-economic benefits that this strategy will provide to the Tunisian economy in terms of increased investments, a clean economic growth, job creation and preserving the environment. Similarly, improving energy efficiency would contribute to this energy transition by reducing the demand for energy. In this regard, a Tunisian solar plan was adopted in 2015, which aims to reduce primary energy demand by 30% and increase the share of renewables in the electricity production mix to 30% by 2030. I would like to thank the International Renewable Energy Agency (IRENA) for its support throughout the process to deliver the Renewables Readiness Assessment report that provides a detailed analysis on the status of renewable energy in the country and identifies short- to medium-term actions needed to develop enabling frameworks conducive to increased renewable energy investments. This analysis was conducted through close collaboration between the National Agency for Energy Conservation (ANME), the Ministry of Industry, Energy and Mines and IRENA. It provides relevant and focused information to all the stakeholders in the field of renewable energy, including governmental institutions, public and private-sector companies, and regional and international development organisations. On behalf of the Ministry of Industry, Energy and Mines let me reiterate my thanks to, all the IRENA team members and national stakeholders who contributed to the completion of this report. I hope that this co-operation will be accelerated in the future, allowing the achievement of the Energy Transition goals in Tunisia. H.E. Mr Mohamed Boussaîd, Minister of Industry, Energy and Mines, Republic of Tunisia 4
The Republic of Tunisia Foreword FOREWORDS from the IRENA Director-General Tunisia’s need to ensure a continuous energy supply, enhance energy security and long-term industrial and socio- economic development provides a compelling case for renewables. As governments advance on recovery plans amid significant public financing constraints, an energy transition with renewables is a central pillar of decarbonising the energy mix. With increasing cost-competitiveness and abundantly available resources, renewable energy solutions will be instrumental in achieving the objectives of improving energy security, reducing cost of energy supply for consumers and advancing environmental preservation. Tunisia’s energy transition is notably based on the implementation of an energy management strategy that is built on the increase of energy efficiency and the development of renewable energy, with a 30/30 target to reduce primary energy demand by 30% in 2030 compared to the trend scenario; and renewable energy to 30% of the electricity production by 2030, in comparison to the installed 373 MW renewable energy in 2019. Renewables Readiness Assessment: Tunisia, prepared in collaboration with the National Agency for Energy Conservation (ANME) and the Ministry of Industry, Energy and Mines, identifies key challenges as the country pursues environmentally and economically sustainable power and heat. It offers recommendations under five thematic areas that address renewables applications in the power sector and long-term energy planning, and attract renewable energy financing. The recommended actions present the collective outcome of which is for renewables to reach a much higher share in Tunisia’s energy mix while improving energy security and cost of supply. Tunisia has made important strides over the past decade to encourage the involvement of the private sector and accelerate the realisation of national objectives, the assessment finds the need to improve the mapping of renewable energy resources, establish an energy planning framework with higher shares of renewables that building capacity of local financing institutions and developers will unlock further investment in the sector, and reinforce Tunisia’s renewable energy targets. IRENA wishes to thank the team at ANME for their key input and engagement. We also appreciate the valuable contributions of numerous other stakeholder and international partners. I sincerely hope the resulting study helps to accelerate Tunisia’s shift to a sustainable energy future. Francesco La Camera Director-General, International Renwable Energy Agency 5
The Republic of Tunisia Contents CONTENTS Figures 8 Tables 9 Boxes 9 Abbreviations and acronyms 10 Units of measurement 11 Executive summary 12 Introduction 15 1 1.1 1.2 Country background Renewables Readiness Assessment for Tunisia 15 17 Energy context 18 2.1 Energy supply and demand in Tunisia 19 2.2 Electricity governance 22 2 2.3 Electricity supply and demand 24 2.4 Transmission and distribution 25 2.5 Electricity tariffs 25 Enabling environment for renewable energy 29 3.1 Energy transition strategy 29 • Drivers for the energy transition strategy 30 • Tunisian Solar Plan 32 3.2 Renewable Energy resources and exploitation 33 • Wind energy 33 • Solar energy 34 3 • Hydropower 39 • Biofuels and waste-to-energy 40 • Geothermal energy 40 3.3 Renewable Energy regulatory framework 41 3.4 Renewable Energy institutional framework 47 • Renewable Energy programmes and project pipeline 47 3.5 Financial initiatives for Renewable Energy 50 Key challenges and recommendations 52 4.1 Long-term energy planning 52 4.2 Regulatory framework for Renewable Electricity generation 54 4 4.3 Institutional framework 56 4.4 Financing 57 4.5 Maximising the benefits of Renewable Energy deployment 58 References 61 Annex 1. Renewable Energy institutional roles 64 Annex 2. Sector coupling and the electrification of end-use sectors 66 7
Renewable Readiness Assessment: Figures Figure 1 Gross domestic product growth: Annual change, Tunisia, 2000–2018 15 Figure 2 Evolution of domestic primary energy supply and demand, Tunisia, 1990–2019 18 Figure 3 Domestic primary energy production of crude oil and natural gas, Tunisia, 1991–2019 19 Figure 4 Total primary energy supply by source, Tunisia, 1990–2018 19 Figure 5 Energy import dependency, Tunisia, 2010–2018 20 Figure 6 Energy import bill, Tunisia, 1993–2017 20 Figure 7 Total final energy consumption, Tunisia, 2018 21 Figure 8 Total final energy consumption by sector, Tunisia, 2018 21 Figure 9 Total final energy consumption by source and sector, Tunisia, 2018 23 Figure 10 Annual peak load, Tunisia, 20017- 2018 24 Figure 11 Evolution of electricity consumption by voltage level, Tunisia, 2018 25 Figure 12 Evolution of electricity consumption in high-voltage and medium-voltage levels by 25 economic sector, Tunisia, 2018 Figure 13 Evolution of medium-voltage electricity selling prices for Uniform tariff subscribers, Tunisia 28 Figure 14 Energy strategy targets, Tunisia 29 Figure 15 Global weighted average of total installed costs and project percentile ranges for 31 concentrated solar power, solar photovoltaic and onshore and offshore wind, 2010 - 2018 Figure 16 Renewable energy target, Tunisia, 2030 32 Figure 17 Wind map of Tunisia 33 Figure 18 Electricity generation of wind farms, Tunisia, 2009–2019 34 Figure 19 Global horizontal irradiance, Tunisia 35 Figure 20 Direct normal irradiance, Tunisia 35 Figure 21 Cumulative installed solar photovoltaic capacity for self-production on the low-voltage grid, 36 Tunisia, 2011–2019 Figure 22 Sector distribution of photovoltaic projects relating to the medium-voltage grid, Tunisia, 37 Figure 23 Distribution of power installations, Tunisia, 37 Figure 24 Registered Solar PV installers 37 Figure 25 Proposed TuNur consolidated solar power project in southern Tunisia 38 Figure 26 Solar collector area installed under Prosol programme, Tunisia, 2005–2018 38 Figure 27 Area of solar collectors, Tunisia, 2018 39 Figure 28 Annual hydropower production, Tunisia, 2005–2018 40 Figure 29 Flexibility solutions 43 Figure 30 Procedure for energy-selling projects under Authorisation scheme, Tunisia 46 Figure 31 Project proposal procedure for energy-selling projects under Concession scheme, Tunisia 47 8
The Republic of Tunisia Tables FIGURES, TABLES AND BOXES Table 1 Main economic indicators, Tunisia, 2015–2018 16 Table 2 Composition of net power generation capacity, Tunisia, 2016 - 2018 24 Table 3 Low-voltage tariff categories, Tunisia 26 Table 4 Current tariffs for low-voltage network, Tunisia, June 2019 26 Table 5 Time schedule for Four-shift tariff, Tunisia 26 Table 6 Medium-voltage tariffs, Tunisia, June 2019 27 Table 7 Medium-voltage tariffs, Gray Cement industry, Tunis 28 Table 8 High-voltage electricity tariffs, Tunisia 28 Table 9 Hydropower stations, Tunisia, 2015 39 Table 10 Overview of renewable energy support policies and regulation, Tunisia 41 Table 11 Criteria under the legal regimes for renewable energy projects, Tunisia 42 Table 12 Provisions for self-consumption projects connected to low- and medium-voltage grids, Tunisia 45 Table 13 Revised renewable energy programme targets, Tunisia, 2017–2022 48 Table 14 Geographical distribution of renewable energy projects under Concession scheme, Tunisia 48 Table 15 Renewable capacities announced under the first call for projects, 49 Table 16 Proposed capacity for installation by Tunisian Company of Electricity and Gas, Tunisia 50 Table 17 Financial incentives provided by the Energy Transition Fund for renewable energy, Tunisia, 2018 51 Boxes Box 1 Five pillars of Tunisia’s Strategic Development Plan, 2016-2020 16 Box 2 Tunisia Solar Plan 32 Box 3 Open Solar Contracts, Tunisia 43 Box 4 Leveraging local capacity and the materials required for renewable energy technologies 56 Box 5 Leveraging local capacity, distribution of human resources and occupational requirements 60 9
Renewable Readiness Assessment: Abbreviations ANME National Agency for Energy Management (Agence Nationale pour la Maîtrise de l’Energie) ANGED National Waste Management Agency (Agence Nationale de Gestion des Déchets) CSP Concentrated Solar Power CTER Technical Commission for Independent Power Production from Renewable Energy (Commission Technique de production privée de l’électricité à partir des Energies Renouvelables) DNI direct normal irradiance FTE Energy Transition Fund (Fonds de Transition Energétique) GDP gross domestic product HV high voltage IPP independent power producer IRENA International Renewable Energy Agency LV low voltage MIEM Ministry of Industry, Energy and Mines (Ministère de l’Industrie, de l’Energie et des Mines) MISME Ministry of Industry and Small and Medium-sized Enterprises (Ministère de l’Industrie et des Petites et Moyennes Entreprises) MEMTE Ministry of Energy, Mines and the Energy Transition (Ministère de l’Energie des Mines et de la Transition Enérgitque) MV medium voltage NDC Nationally Determined Contribution (national climate pledge under the Paris Agreement) O&M operation and maintenance PPA power purchase agreement PV photovoltaic RRA Renewables Readiness Assessment SDP Strategic Development Plan SME small or medium-sized enterprise STEG Tunisian Company of Electricity and Gas (Société Tunisienne de l’Electricité et du Gaz) SWH solar water heating TFEC total final energy consumption TND Tunisian dinar TPES total primary energy supply TSP Tunisian Solar Plan VRE variable renewable energy 10
The Republic of Tunisia Units of measurement ABBREVIATIONS AND UNITS OF MEASUREMENT GW gigawatt GWh gigawatt-hour kWh kilowatt-hour kWp kilowatt peak km kilometre km2 square kilometre ktoe thousand tonnes of oil equivalent kV kilovolt m2 square metre MW megawatt MWh megawatt-hour m/s metres per second 11
Renewable Readiness Assessment: Executive summary Tunisia has witnessed growing deficits in its energy balance To achieve the country’s update objectives, over the past two decades. This trend is largely the result the TSP has established a target for total of increasing energy consumption in all economic sectors, installed renewable energy capacity at coupled with the decline of hydrocarbon production. 1 860 megawatts (MW) by 2023 and 3 815 MW by This led to an energy deficit amounting to 50% in 2019 2030, a five-fold and ten-fold increase, respectively, compared to 7% in 2010, thus leading the country to from the 2017 installed renewable energy capacity. become more dependent on imported fossil energy. The targets were updated to reflect Tunisia’s climate The electricity generation mix is dominated by natural commitment to reduce the country’s carbon intensity gas, while renewable energy resources represented only by 41% compared to 2010 by 2030 compared to an 3.0% in 2019. This strong dependence on natural gas unconditional target to reduce carbon intensity by 13%, has serious implications for Tunisia’s energy security, specifically as pledged in its Nationally Determined since domestic production of gas has stagnated to the Contributions under the Paris Agreement. The bulk point of even declining in recent years. of the country’s identified mitigation potential arises from the energy sector, including 68% from energy In response to the energy security challenges of the efficiency and 32% from renewable energy. early 2000s, and Tunisia’s vulnerability to volatile international energy prices, the country has decided to The considerable amount of installed renewable embark on an energy transition process as part of its energy capacity needed to meet the targets set out wider sustainable economic and social development in the TSP will require extensive private investment strategy. Amid the coronavirus outbreak in early 2020, support. In response, the Tunisian state adopted renewables and energy efficiency have become a key regulatory reforms in 2015 through a new law (Law part of the country’s recovery plans. No. 2015-12) relating to the production of electricity from renewable energy. The objective is to establish Tunisia’s energy transition is notably based on: a legal framework that is conducive to private- sector investment in the production of electricity • Diversification of the energy mix and integration of that will arise from renewable energy sources through three new regulatory regimes: (i) self- renewable energies generation/consumption; (ii) independent power • Strengthening energy efficiency production for local consumption (concession and authorisation); and (iii) independent power production • Rationalisation of the energy subsidy for export. • Strengthening of the grid and the interconnections Notwithstanding the new legal framework and The implementation of an energy management the various measures adopted by the Tunisian strategy that is built on the increase of two components: government over the past two years, several of these (i) energy efficiency and the development of measures include enabling policy initiatives, update renewable energy, with a 30/30 target to reduce of the current documentation surrounding current primary energy demand by 30% in 2030 compared to electricity purchase agreements, and establishment the trend scenario; and (ii) renewable energy to 30% of guarantees to encourage the development of of the electricity production by 2030. renewable energy. There remain several challenges that hinder the transition, however; these have been The Tunisian Solar Plan (TSP) is the intended operational identified under Tunisia’s national energy strategy. tool to implement the strategy to increase the share of renewable electricity. The latest TSP version was updated Various barriers to renewable energy development by Tunisia’s National Agency for Energy Management were identified through the Renewables Readiness (ANME – Agence Nationale pour la Maîtrise de l’Energie) Assessment (RRA) process. These could be addressed in 2015 and adopted by the government in July 2016. through eight key recommended actions. 12
The Republic of Tunisia EXECUTIVE SUMMARY The RRA’s main recommendations can be summarised Simplify procurement procedures for as follows: power grid development Establish a renewable energy planning • The acquisition and implementation of grid and scheduling framework transmission infrastructure by the Tunisian Company of Electricity and Gas (STEG) is subject • With the TSP calling for additions of about to long-running public procurement procedures, 4 gigawatts (GW) of variable renewable energy resulting in a time lag between renewable energy (VRE) sources (i.e. solar and wind power) to the plant completion dates and connection to the grid grid, the country will require a holistic long-term to send out the electricity produced. planning methodology that will include realistic scheduling for capacity additions to the national • IRENA has established that integrated studies with electricity system beyond 2023. Advance plans on key renewable energy stakeholders could help new capacity, locations and technologies can help identify grid infrastructure scenarios. Such studies to address system constraints. VRE deployment would reflect planned additions of both solar must be supported by robust long-term energy and wind capacity totalling 1 000 MW under the and power sector planning. Concessions scheme. This would ensure alignment between renewable generation development and • The plan could also address electricity grid grid infrastructure reinforcement. infrastructure development to enable the smooth integration of VRE into the system. The plan Clarify institutional roles and should provide long-term visibility on renewable strengthen human resources energy development prospects in Tunisia. In this context, the opportunities for regional dialogue • Private-sector developers have faced difficulties and collaboration are significant and may lead to understanding the procedures to obtain authorisation broader flexibility solutions (IRENA, 2020a). for projects, given the considerable number of ministries and public institutions involved in renewable Enhance renewables resource energy projects. In response, the Government of assessment through zoning Tunisia has taken preliminary measures, supported by international partners in the field, such as the United • Long-term energy planning relies on data from Nations Development Programme. Measures include a resource databases. Tunisia’s current resource Help Desk provided by the ANME that would provide database, therefore, should be improved to reflect guidance to the private sector. the recent assessment campaigns on renewable energy resources. More detailed resource data • IRENA has found that combining efforts and will be essential to define promising development creating a single online platform may ensure zones across Tunisia’s territory for different transparency and clarity of the roles of the renewable energy technologies. The Global various involved institutions in terms of project Atlas for Renewable Energy, an online resource agreements. The platform would include guidelines assessment platform hosted by the International under a standard template and would list the Renewable Energy Agency (IRENA), provides public institutions involved, including the roles and guidance on identifying cost-effective zones with responsibilities of each during the various stages high renewable energy potential. of project implementation (Section 4.3). COVID-19 pandemic recovery Amid the coronavirus outbreak in early 2020, renewables and energy efficiency have become a key part of the country’s recovery plans. 13
Renewable Readiness Assessment: • Renewable energy transition will bring with it Create a dedicated financing mechanism ample benefits, including the opportunity to build for solar water pumping human resources and skills. In this context, public institutions may opt to strengthen their current • Design a programme encouraging farmers to human capacity through enhanced training substitute solar photovoltaic (PV) energy for sessions on the technical, economic, administrative diesel, given the important socio-economic and legal aspects relating to the development of impacts of solar water pumping. This programme renewable energy projects. may be developed under the broader Prosol and Prosol électrique programme mechanisms, such Establish an independent that the state subsidy, including the credit system, electric power regulator is compatible with the repayment capacity of farmers. • The procedures to create and establish an independent regulatory authority for the electricity Involve local banks in the financing sector are being finalised as part of Tunisia’s NDCs of renewable energy to ensure the achievement of its renewable energy targets. The authority will ensure compliance with • The development of renewable energy applications regulations and will promote a transparent and fair in Tunisia, particularly for farmers and small- and competitive environment for private producers.1 medium-size enterprises, requires involvement by local banks. To improve the capacity for project risk • The regulatory authority will, among other assessment at local financial institutions and boost responsibilities, oversee a range of project their confidence to develop lending schemes, the development procedures for renewable energy, government should reinforce their human and including the monitoring of legislation to ensure technical capacity. effectiveness and the validation of technical conditions for electricity evacuation. It also will • The search for favourable foreign financial lines ensure the streamlining of not only the governing should be strengthened, particularly through administration but also of the various market bilateral co-operation and climate financing actors. programmes guaranteed by the Tunisian Guarantee Company (Société tunisienne de garantie)2 or Operationalise the Energy Transition Fund reinforced by the Central Bank of Tunisia. This should reduce concerns that surround private • The Energy Transition Fund (FTE – Fonds de sector investment risk over the need to commit transition énergétique) is the principal financing 30% equity for PV installations and thus improve tool for energy efficiency and renewable energy financial viability. activities in Tunisia. For the fund to effectively support renewables in the country, work must • The Energy Transition Fund, Tunisia Investment begin to mobilise the necessary funding from Authority and Tunisian Guarantee Company can the public and private sectors to foster their be complemented with guarantee funds or secure development. To do this effectively will require a credit lines (e.g. liquidity guarantees or credit lines) combination of incentives, loans and credit lines to local commercial banks by international finance from international finance institutions. institutions like the French Development Agency (AFD) and International Finance Corporation. 1 Several international partners are working with ANME to establish an electricity regulatory authority to oversee licenses, power grid connections and third-party access for auto producers. 2 A public interest company that guarantees various loans granted to small- and medium-size enterprises by credit institutions. 14
The Republic of Tunisia Introduction INTRODUCTION 1.1 Country background Tunisia is located in the northernmost part of Africa. Tunisia’s capital, Tunis, is in the northeast of the country. The total surface area coverage of Tunisia is 163 610 square kilometres (km2), with arable land constituting 19% of total land area (Trading Economics, 2020) and the Sahara representing more than 30% (RES4MED, 2016). The population of Tunisia in 2017 reached 11.54 million, with an annual growth rate of 1.1%. Total urban population is 69% (INS, 2018a). Tunisia benefits from unique climatic features, placing the country as an emerging economic hub and attractive tourist destination. The climate varies considerably from one region to another - Mediterranean in the north and along the coast, semi- arid within the country and arid in the south. The landscape similarly contrasts, with mountainous regions in the northwest, steppes in the centre, vast plains in the north, the Sahel to the east and desert in the south. Tunisia had an average annual gross domestic product (GDP) growth rate of 4.3% over the period 2000–2010, and was considered the most competitive economy in Africa. Despite political instability, Tunisia has witnessed a rapid recovery of its GDP growth following a recession in 2011, reaching 4.0% in 2012. Since then, however, it has struggled to maintain this level, with a 2.6% growth rate in 2018. The evolution of GDP growth since 2000 is shown in Figure 1. Figure 1. Gross domestic product growth: Annual change, Tunisia, 2000–2018 8.0 7.0 6.2 6.7 6.0 5.0 4.7 5.2 4.0 4.0 3.8 4.7 4.2 GDP growth (%) 3.0 3.0 3.5 3.5 1.8 2.5 3.0 2.9 2.0 1.4 1.0 1.3 1.2 1.3 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (1.0) (2.0) -1.9 (3.0) Annual growth (%) Source: Trading Economics (2020). 15
Renewable Readiness Assessment: Table 1. Main economic indicators, Tunisia, 2015–2018 2015 2016 2017 2018 Investment rate 19.9 18.4 19.3 20.4 (% of GDP) Unemployment rate 15.4 15.5 15.5 15.5 (%) Rate of coverage 69.7 69.8 68.8 69.2 (exports/imports in %) Budget deficit 4.8 6.2 5.9 4.6 (% of GDP) Government debt 55.4 61.9 69.9 71.4 (% GDP) Source: Central Bank of Tunisia (2018). Note: GDP = gross domestic product; GNDI = gross national disposable income. Several factors challenge the national economic Box 1. Five pillars of Tunisia’s Strategic situation today, including the devaluation of the Development Plan, 2016-2020 Tunisian dinar, thus amplifying the public debt and foreign trade deficit to record highs. As of September • Good governance includes fighting corruption 2018, Tunisia has a public debt of 71.4% relative to and easing the administrative barriers to GDP, with a foreign trade deficit that widened by economic participation, in order to increase 16.8% over 2017 (Trading Economics, 2020). Table 1 opportunities for success for all citizens. presents further details on the economic indicators recorded in Tunisia during the last few years. • Shifting to a hub economy focuses on increasing productivity for competitiveness Tunisia has undertaken a series of reforms, including a and positioning Tunisian businesses in global Strategic Development Plan (SDP) that was adopted value chains. for the period 2016–2020 to boost economic activity and investment, as well as to reassure stakeholder • Promoting human development and social confidence. The SDP represents a new development inclusion emphasises quality education, model that is based on the promise of a new social women’s participation in economic and contract under which the state is expected to provide political activity, improved health outcomes, a level playing field to ensure inclusion and equal and a social protection system. opportunity. • Tackling regional disparity seeks to achieve The main objective of the SDP is the transformation the ambitions of economic development and modernisation of Tunisia’s existing economic in rural regions through advancing model, aiming to reduce unemployment to 11.5% and investment in infrastructure and supporting reach an average GDP growth rate of 5% in 2020. entrepreneurship. • Promoting green growth for sustainable development to ensure the sound utilisation of natural resources, with emphasis on rationalising water and energy use. 16
The Republic of Tunisia Applying the RRA framework to Tunisia provides a INTRODUCTION 1.2 Renewables Readiness Assessment for Tunisia comprehensive analysis of the presence or absence of enabling conditions for the development of renewables. The International Renewable Energy Agency (IRENA) developed the Renewables Readiness Assessment Crucially, the analysis considers how the country’s (RRA) as a tool for carrying out a comprehensive renewable energy policies can contribute to its national evaluation of the conditions for renewable energy policy objectives. This coincides with the government’s deployment in a country. The RRA is a country-led efforts to assess the context for renewables in Tunisia, and consultative process. It provides a framework particularly since the introduction of the country’s for multi-stakeholder dialogue to identify challenges renewable energy action plan, the Tunisian Solar Plan to renewable energy deployment and to arrive at (TSP), was put in place in 2015. The RRA highlights the recommendations to overcome existing barriers. key issues to be tackled in implementing the TSP, with Short-and medium-term recommended actions are the aim of recognising Tunisia’s positionas a regional presented to governments to guide the formation hub economy as part of the broader framework of of new policies or the reform of existing ones, thus the SDP. opening a more enabling environment for renewable energy. The RRA also consolidates existing efforts and A general overview of the Tunisian energy sector mobilises resources for priority actions. was outlined during the first stage of process, with a special focus on renewable energy. Potential The RRA elaboration process was launched at the barriers and bottlenecks were identified to the ensure request of the previously known Ministry of Energy, successful deployment of renewables. IRENA and Mines and Renewable Energy (Ministère de l’Energie ANME organised an expert validation workshop on des Mines et des Energies Renouvelables), now known 21 June 2018 to validate these findings and facilitate as Ministry of Industry, Energy and Mines. However, open dialogue among a wide range of stakeholders. from March 2020 to October 2020, renewable energies The main objectives were to discuss the identified were taken up by the Ministry of Energy, Mines and the Energy Transition (Ministère de l’Energie des Mines et challenges for renewable energy deployment and the de la Transition Enérgitique). From September 2018 corresponding recommendations to ensure favourable to March 2020, renewable energies were taken up by conditions for the sector. Ministry of Industry and Small and Medium Enterprises (MISME – Ministère de l’Industrie et des Petites et The event provided the opportunity to review global Moyennes Entreprises,).3 renewable energy best practices and highlight the country’s commitments to renewable energy. It IRENA developed this RRA assessment for Tunisia enabled local stakeholders to validate the set of in conjunction with the National Agency for Energy recommended actions identified through the RRA Management (ANME – Agence Nationale pour la Maîtrise process to further advance the renewable energy de l’Energie), the public agency responsible for executing sector, for endorsement by MEMTE. This report lays the government’s policies in energy management out the necessary actions and conclusions drawn from studying and promoting renewable energy. the RRA process in Tunisia. 3 Given the role of the different institutions in renewable energy governance, citations within the report are referenced to the Ministry of Industry and Small and Medium Enterprises and the Ministry of Energy, Mines and Renewable Energy. Meteline – Kchabta wind park in Bizerte Photograph: National Agency for Energy Conservation (ANME) 17
Renewable Readiness Assessment: Energy Context The energy sector is a key contributor to Tunisia’s various economic sectors. In the past two decades, however, the country has witnessed a growing energy balance deficit, largely as a result of relying on fossil fuel sources – oil and natural gas – to meet its heightened energy demand. The decline of its own hydrocarbon resources has led to increased dependence on fossil fuel imports, which rose to record levels in 2019 when the deficit in the balance of primary energy reached 5 672 thousand tonnes of oil equivalent (ktoe), as shown in Figure 2, highlighting that 49% of total energy consumed is imported. In response, Tunisia has begun to leverage its wide array of renewable energy sources to diversify its energy mix. This is coupled with energy efficiency programmes to alleviate its energy balance deficit. Figure 2. Evolution of domestic primary energy supply and demand, Tunisia, 1990–2019 10000 9000 8000 Total Primary Energy (thousand toe) 7000 6000 5000 4000 3000 2000 1000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total domestic supply Total demand Source: (MISME, 2019a) 18
The Republic of Tunisia ENERGY CONTEXT 2.1 Energy supply and demand in Tunisia Domestic production of oil and natural gas has dropped significantly since 2010 (54% and 47%, respectively), as The country is close to being fully electrified at 99.8%. The shown in Figure 3. electricity generation mix is dominated by natural gas at 97.5%. The strong dependence on natural gas has serious In 2018, natural gas accounted for 48.7% of total primary implications for Tunisia’s energy security, as domestic energy supply (TPES), equivalent to 5 569 ktoe, and oil production of natural gas has stagnated and even declined (including primary and secondary oil) accounted for 40.8 % during recent years. Between 1990 and 2019, primary of TPES, totalling 4 665 ktoe (Figure 4) (MISME, 2018b). The energy production fell from 5 400 ktoe to 3 703 ktoe. remainder largely came from biomass and waste sources. Figure 3. Domestic primary energy production of crude oil and natural gas, Tunisia, 1991–2019 7 000 prodcution (thousand toe) Domestic primary energy 6 000 5 000 4 000 3 000 2 000 1 000 0 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Crude oil Natural Gas Sources: INS (2018a), MISME (2019a). Figure 4. Total primary energy supply (TPES) by source, Tunisia, 1990–2018 12 000 10 000 8 000 TPES (ktoe) 6 000 4 000 2 000 0 1990 1995 2000 2005 2010 2015 2016 2017 2018 Coal 82 71 79 0 0 0 0 0 0 Natural Gas 1 234 1 924 2 732 3 091 5 083 5 055 5 209 5 436 5 569 Nuclear 0 0 0 0 0 0 0 0 0 Hydro 4 3 6 12 4 6 4 2 1 Geothermal, solar, wind 0 0 2 4 39 89 100 103 103 Biofuels and waste 638 750 934 1 121 1 058 1 076 1 081 1 082 1 090 Primary and secondary oil 2 989 3 053 3 554 4 087 3 933 4 573 4 552 4 612 4 665 Sources: INS (2018a), MISME (2019a). 19
Renewable Readiness Assessment: Primary energy demand reached 9 606 ktoe in 2019 The country’s energy deficit problem is likely to against 8 358 ktoe in 2010, with an average annual deteriorate further given rising energy demand, growth rate of 1.7%. After a dip in 2016, the energy coupled with depleting oil and gas production. demand/supply balance deficit accelerated again The current increase in energy imports highlights in 2017, strengthening a major structural deficit that Tunisia’s economic and social vulnerability amid compels the country to further rely on energy imports, volatile international energy prices, further increasing from an import dependency rate of 7% in amplified with the devaluation of the Tunisian dinar 2010 to 60% in 2018, as shown in Figure 5. (TND). Figure 6 shows the evolution of the energy import bill, which peaked in 2014 at more than TND 7 billion (over USD 3.5 billion at the time or USD 2.5 billion at mid-2019 exchange rates). Figure 5. Energy import dependency, Tunisia, 2010–2018 2018 2017 2016 2015 Year 2014 2013 2012 2011 2010 0% 10% 20% 30% 40% 50% 60% 70% Sources: ONE (2018a), MISME(2019b). Figure 6. Energy import bill, Tunisia, 1993–2017 Millions (TND) 2019 194 6 285 3 388 2018 801 5 676 2 523 0 2 000 4 000 6 000 8 000 10 000 12 000 Crude Oil Oil products Natural Gas Source: INS (2018b). 20
The Republic of Tunisia ENERGY CONTEXT According to the National Energy Observatory Energy is used in various end-use sectors in the (Observatoire National de l’Energie),4 total final economy, including transport (32%), industry (27%) energy consumption (TFEC) reached approximately and the residential sector (27%). This is followed by 8 710 ktoe in 2019; excluding biomass,5 it amounted to the commercial and agricultural sectors (8% and 6%, 7 620 ktoe. Oil products accounted for 53% of TFEC, respectively), as shown in Figure 8. followed by natural gas and electricity in equal shares, as shown in Figure 7. Figure 7. Total final energy consumption, Tunisia, 2018 10.0% 14.0% 16.3% 52.6% 6.3% 0.8% 15.3% 12.5% 0.7% 6.5% 47.2% 17.8% Oil products Natural gas Biomass Gasoline Kerosene Jet fuels Solar, Geothermal, etc. Electricity Diesel oil Fuel oil LPG Petcoke Source: MISME (2018b). Note: LPG = liquefied petroleum gas. Figure 8. Total final energy consumption by sector, Tunisia, 2018 6% 8% 27% Industry Transport Residential Commericial 27% Agriculture 32% Source: IEA (2019), MISME (2019b). 4 The National Energy Observatory is the public institution mandated by MEMTE to ensure the effective collection of data relevant to energy. Since April 2017, it has been renamed the National Observatory of Energy and Mines (Observatoire National de l’energie et des Mines). 5 Biomass in the Tunisian context mainly relates to modern means of biomass, as defined by the International Energy Agency’s statistics database, used in relation to Tunisia’s residential sector (Figure 9). 21
Renewable Readiness Assessment: Figure 9. Total final energy consumption by source and sector, Tunisia, 2018 4000 Total final energy consumption (thousand toe) 3500 3000 2500 2000 1500 1000 500 0 Commercial and Transport Industry Residential Agriculture public services Biofuels and waste 0 0 855 12 0 Electricity 9 493 430 387 100 Natural Gas 185 907 252 190 26 Oil Products 2364 2162 583 101 398 Source: IEA (2019), MISME (2019a). The source of TFEC differs from one economic • Directorate General for Electricity and Renewable activity to another. Figure 9 shows that natural gas Energy: Responsible for implementing state policy is consumed mainly by the industrial sector, while the in the renewable energy sector and examining energy consumption of the agricultural, residential requests for private production and self- and transport sectors is dominated by petroleum consumption of electricity from renewable energy. products, particularly liquefied petroleum gas in households that are not connected to the natural gas • Directorate General for Energy from Hydrocarbon distribution network. sources: Re-sponsible for implementing state policy in the hydrocarbon sector. 2.2 Electricity governance • Directorate General for overseeing Strategy As of March 2020, the Tunisian electricity sector is and Co-ordination: Responsible for developing managed by the Ministry of Energy, Mines and the programmes and strategies, as well as national Energy Transition. For the past two years, renewable and sectoral policies, pertaining to the energy energy portfolio was managed by the Ministry of sector, coupled with action plans to ensure better Industry, Small and Medium Size Enterprises. MEMTE management of resources. is responsible for electricity infrastructure, planning and the implementation of national policy in the field • Directorate General for Manufacturing Industries: of electricity, energy efficiency and renewable energy, Responsible for implementing government policy with regulatory oversight also carried out by the relevant to industry, including development of an ministry. Yet, Tunisia has no independent regulator. enabling environment for the promotion of the Instead, MEMTE monitors and analyses the evolution renewables industry. of supply and demand, with two directorates responsible for carrying out specific activities in the energy sector: 22
The Republic of Tunisia ENERGY CONTEXT The monopoly on electricity generation, transmission The Technical Commission for Renewable Energy and distribution from 1962 to 1996 was held by the (CTER – Commission Technique des Energies Tunisian Company of Electricity and Gas (STEG – Renouvelables) approves power generation projects Société Tunisienne d’Electricité et du Gaz). STEG is from renewable sources, subject to the system of a state-owned company responsible for managing authorisation under the Ministry of Energy, Mines the production, transmission and distribution of and Renewable Energies while approving extensions electricity and gas in Tunisia in high-, medium- to the validity of authorisations. In addition, CTER and low-voltage lines and pipelines, including the is the entity responsible for verifying the feasibility implementation and operation of renewable energy of developing private renewable projects on lands projects. belonging to the state domain. It also examines all queries and concerns relevant to the production of ANME, a public institution under the Ministry of electricity from renewable energy resources. Energy, Mines and the Energy Transition, became responsible as of 1985 for executing the government’s Law No. 96-27 (April 1996) authorises the private policies for promoting energy efficiency measures generation of electricity through concessions provided and the deployment of renewable energy. Moreover, by state authorities. It does not allow, however, unsolicited ANME is responsible for proposing regulations and private power production (either from conventional or manages the Energy Transition Fund (FTE – Fonds renewable sources). Only one concession agreement has de transition énergétique). ANME’s additional been granted, authorising the creation and operation of responsibilities include managing the specific Tunisia’s first IPP (Carthage Power Company in Radès, renewable energy programmes (i.e. Prosol and Prosol 471 megawatts (MW)). This power station began électrique) and developing awareness and training operation in 2002 under a 20-year power purchase campaigns for the deployment of renewable energy. agreement (PPA). A private initiative to generate electricity from flared gas led to a change in legislation, The High Commission for Independent Power thus paving the way for the second concession Production (Commission Supérieure de la agreement and Tunisia’s second IPP (Société d’Electricité Production Indépendante d’Electricité), a commission d’El Bibane, SEEB, 27 MW) commissioned in 2003 in El established under Law No. 96-27, was organised as Bibane, southern Tunisia, and shut down in 2010 due to an inter-ministerial body responsible for deciding unforeseen gas supply contamination and the struggle on the procedures and selection criteria for the to meet scheduled loan repayments. As of February public tender process to (i) select independent 2018, the concessions are operationalised by Power power producers (IPP); (ii) award contracts to IPPs; Turbine Tunisia. (iii) pass rulings on granting tax incentives to IPP investors, the benefits from which are to be granted Law No. 2015-12 sets the framework for renewable energy to the developers of concessions; as well as any other proliferation, which includes electricity production from matter relating to independent power production. renewable energy to generate electricity, transport the generated electricity to other consumption points The Interdepartmental Commission for through the national grid, and sell the excess produced Independent Power Production (Commission energy to STEG at fixed prices within the limits of the Interdépartementale de la Production Indépendante maximum rate. With that said the law introduced d’Electricité), an inter-ministerial body serving as three new regulatory regimes: (i) self-generation/ a de facto regulator, is responsible for suggesting consumption; (ii) independent power production for the terms and conditions to be granted to IPP local consumption (concession and authorisation); and concession developers, reviewing the reports and (iii) independent power production for export. The fixed examination of tenders submitted for decision to the prices are set by the Minister in charge of energy - in this High Commission for Independent Power Production, case MEMTE - on opinion of the technical commission, monitoring the negotiations for concession awards with a contract subject to approval by MEMTE. and securing public subsidies on a case-by-case basis. Moreover, the Interdepartmental Commission Law No. 2015-12, however, was amended by for Independent Power Production is responsible for Law 2019-47, dated 29 May 2019, with adjustments proposing the extension of concession benefits and to allow for corporate PPAs. This provides the right for overseeing matters relevant to the implementation companies adopting renewables for self-production to of projects submitted by the Ministry of Energy, sell electricity to other consumers or companies with Mines and Renewable Energies. subscribed power greater than the threshold set by MEMTE electricity 30% and use the national grid network to transport electricity. 23
Renewable Readiness Assessment: 2.3 Electricity supply and demand In this context, domestic production of natural gas stood at approximately 2 139 ktoe, equivalent to 58% By the end of 2018, total installed power generation of the country’s overall electricity production needs. capacity had reached 6 147 MW, of which STEG owns With domestic natural gas production declining, and operates 74.6% (4 587 MW). The remainder includes Tunisia’s energy security could face serious challenges the natural gas combined-cycle IPP, commissioned in in the coming years. 2002 and managed by Carthage Power Company, with an installed capacity of 471 MW. Natural gas accounts Tunisia’s peak load has experienced robust growth for 94.5% of domestic installed power capacity. See during the past decade, as shown in Figure 10. The modifications in Table 2. The evolution of the power annual peak in electricity demand increased from generation capacity during the period 2016-2018 and 2 172 MW in 2005 to 4 025 MW in 2017 (STEG, 2018a), its composition are detailed in the table. climbing at an average pace of 161 MW/year and with an average annual growth rate of 5.5%. In 2018, Electricity production by STEG and Carthage Power however, the peak load dropped due to heightened Company during the period 2013–2018 increased energy efficiency measures. Since 2000, peak load from 16 995 gigawatt-hours (GWh)/year to demand has transitioned from the winter period 19 060 GWh/year (STEG, 2019a), recording an average at night to the summer season in the day due to an annual growth rate of 3%. increase in residential and commercial space cooling. Table 2. Composition of net power generation capacity, Tunisia, 2016 - 2018, Types of equipment 2016 2017 2018 Steam turbines 1 020 920 660 Combined-cycle gas turbines 1 639 1 612 1 612 Tunisian Company of Open-cycle gas turbines 1 772 2 004 2 004 Electricity and Gas Hydro 62 62 66 Wind 240 240 245 Total STEG 4 753 4 838 4 587 Solar rooftop* 36 45 62 Independent power producer 471 471 498 Total installed capacity (MW) 5 260 5 315 6 147 * Based on interviews conducted with National Agency for Energy Management (Agence Nationale pour la Maîtrise de l’Energie) and Tunisian Company of Electricity and Gas (STEG – Société Tunisienne de l’Electricité et du Gaz). Figure 10. Annual peak load (MW), Tunisia, 20017- 2018 4 200 4 025 3 916 4 000 3 800 3 599 3 600 3 353 3 465 Peak load (MW) 3 400 3 200 3 400 3 010 3 024 3 000 3 144 2 800 2 660 2 600 2 416 2 467 2 400 2 200 2 000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: STEG (2019a), STEG (2018a); STEG (2016). 24
The Republic of Tunisia ENERGY CONTEXT Electricity consumption increased from 10 355 GWh 2.4 Transmission and distribution in 2005 to 15 671 GWh in 2018, recording an average growth rate of 4% per annum. Despite Tunisia’s STEG operated about 6 906 kilometres (km) of slowdown in economic growth, the industrial sector transmission lines in 2018, with 208 km at the remains the largest consumer of electricity. Its share 400 kilovolt (kV) level, 2 910 km at the 225-kV level, of total electricity consumption, has increased from 2 382 km at the 150-kV level and 1 406 km at the 45% in 2005 to 67% in 2018. Since 2013, the largest 90-kV level. The rate of loss on the transmission grid growth in consumption has been recorded by STEG reached 2.3% in 2018, as in 2017 (STEG, 2019a). customers connected to the low-voltage (LV) grid, accounting for 47% of the electricity consumed in The transmission grid is currently interconnected 2017. Figure 11 illustrates the evolution of electricity via one 400 kV line, two 225 kV lines, one consumption for the different economic sectors 150 kV line and two 90 kV lines. Tunisia also has during the period 2005-2018. two 225 kV interconnections. Electricity trade with countries in the region represents less than 1% of Figure 11. Evolution of electricity national consumption and the interconnections are consumption by voltage level, used mainly for reliability and emergency purposes Tunisia, 2018 (STEG, 2019a). 1 302 GWh To expand interconnections and the capacity of the national grid for renewable energy absorption, an 8% infrastructure project known as ELMED has been 7 390 GWh signed to build an underwater interconnection line with a capacity of 600 MW between Tunisia and Italy (400 kV, direct current, about 200 km). 48% Tunisia’s electricity distribution network totalled 44% 175 389 km by the end of 2018, including 59 691 km medium-voltage (MV) lines and 115 698 km LV lines. 6 856 GWh The number of MV/LV transformer substations reached 75 065 in 2018. Tunisia has an electrification rate estimated at 99.8%. The number of STEG customers High Voltage Medium Voltage Low Voltage connected to the electricity grid is 4.05 million (high voltage (HV): 21 customers; MV: 19 291 customers; Source: STEG (2019a). LV: 4 030 130 customers) (STEG, 2019a). 2.5 Electricity tariffs Figure 12. Evolution of electricity consumption in high-voltage The selling price of electricity supplied to consumers and medium-voltage levels by is set by the Tunisian government based on a proposal economic sector, Tunisia, 2018 submitted by STEG and after approval of MEMTE and the Ministry of Finance. The underlying principle of 8% the electricity tariffs is the level of the supply voltage. 13% 8% LV tariffs depend on the sector of the consumer (residential or non-residential), monthly consumption 4% (in kilowatt-hours (kWh)) and the level of power contracted (in kilovolt amperes). The two LV consumer categories are defined in Table 3. Tariff prices for the LV network are presented in Table 4 for the respective categories. 67% Agriculture Industrial Transport Tourism Services Source: STEG (2019a). 25
Renewable Readiness Assessment: Table 3. Low-voltage tariff categories, Tunisia Low-voltage tariff categories Economic Category Normal Category Level of power supply: ≤ 2 kVA Level of power supply: > 2 kVA Monthly electricity consumption Monthly electricity consumption is up to 200 kWh goes beyond 200 kWh Electricity billing is based on progressive Electricity billing is based on progressive tranches tranches with monthly consumption with monthly consumption (1–200 kWh; 201–300 kWh; (1–50 kWh; 51–100 kWh; 101–200 kWh) 301–500 kWh; greater than 500 kWh) Source: STEG (2019a). Note: kVA = kilovolt ampere; kWh = kilowatt hour. Table 4. Current tariffs for low-voltage network, Tunisia, June 2019 Power Energy price (USD/kWh) charge Range of monthly consumption (kWh/month) Tariff* Sector (USD/ kVA/ 1–50 51–100 101–200 201–300 301–500 501 + month) Economic Category Residential 0.022 (1 and 2 kVA and 0.0322 Non- 0.24 consumption ≤ 200 kWh/month) residential 0.035 Economic Category Residential 0.059 0.073 0.114 0.139 (1 and 2 kVA consumption > 200 kWh/month) Non- 0.24 Normal Category 0.065 0.081 0.117 0.131 residential (> 2 kVA) Source: STEG (2019b). Note: USD = U.S. dollar; kVA = kilovolt ampere; kWh = kilowatt-hour. * TND 1 = USD 0.355 (July 2020). Table 5. Time schedule for Four-shift tariff, Tunisia Time schedule September to May June to August Day 07:00–18:00 06:30–08:30; 13:30–19:00 Morning peak summer – 08:30–13:30 Evening peak 18:00–21:00 19:00–22:00 Night 21:00–07:00 22:00–06:30 Source: STEG (2019b). For MV subscribers, there are two main tariffs: Uniform In addition to the two main tariffs, three special tariffs tariff and the Four-shift tariff. exist for irrigation services in water pumping and agriculture alike, as well as emergency services. These Under the Four-shift tariff, the price per kWh varies are shown in Table 6. Electricity sold to farmers for according to the time of electricity consumption. water pumping is the least expensive. The distribution of the four shifts (day, morning peak summer, evening peak and night) differs between seasons, as shown in Table 5. 26
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